Getting Others to Embrace Risk

Getting Others to Embrace Risk

Why aren't companies hiring? Why aren't homes selling, despite bargain pricing? Why is growth and innovation in some industries so sluggish?

Americans have a well-earned reputation for risk-taking, but these days we are something of a timid lot. Our reluctance to stick our collective neck out has everything to do with the psychology of motivation — specifically, how we think about the goals we pursue. The problem, in a nutshell, is simply this: when making decisions, lately many of us have been focused much more on what we have to lose than on what we might gain.

Whenever we see our goals — whether they are organizational or personal — in terms of what we have to lose, we have what's called a prevention focus. Prevention motivation is about obtaining security, avoiding mistakes, and fulfilling responsibilities. It's about trying to hang on to what you've already got and keep things running smoothly, and it isn't at all conducive to taking chances.

If, instead, we see our goals in terms of what we might gain, we have what's called a promotion focus. Promotion motivation is about getting ahead, maximizing your potential, and reaping the rewards. It's about never missing an opportunity for a win, even when doing so means taking a leap of faith.

In the last decade, researchers in psychology and management departments across the country have conducted hundreds of studies showing that promotion and prevention motivations lead to different strengths and weaknesses, and very different strategic approaches. The promotion focus on potential gain leads to speed, creativity, innovation, and embracing risk, while the prevention focus on avoiding loss leads to accuracy, careful deliberation, thoroughness, and a strong preference forthe devil you know.

The recent recession, coupled with financial and health care reform, have left American businesses (and individual Americans) focused far more on keeping what they've got than boldly going where they've never gone before. People don't want to rock the boat at a time when consumers (and jobs) are harder to find, and when risk feels like recklessness. Unfortunately, they forget that without organizational innovation and growth, no business (and no job) will be safe for long.

If you've got great, forward-thinking ideas, and their reception has been lukewarm at best, you are probably wishing your boss, your coworkers, or your clients were a bit more comfortable with risk. There are really only two solutions: get them to adopt the promotion mindset (the harder option in the current climate), or use the right language to work with their prevention mindset instead. You may be thinking of your great idea as an opportunity for gain, but you can always reframe it as an opportunity for avoiding loss.

To persuade the prevention-minded person to take a risk, recent research by psychologists Abigail Scholer, Xi Zou, Ken Fujita, Steve Stroessner, and E. Tory Higgins suggests that you should emphasize how a course of action can keep your company (or your client) safe and secure — how it will help them to avoid making a terrible mistake. A new venture isn't a chance to get in front of the pack, but a way to not fall behind. ("Everyone is moving in this direction. It's inevitable. We could lose market share if aren't prepared for the future.")

Matching a pitch to the listener's current motivation is the key to effective persuasion. Research shows that even the most timid, prevention-minded person among us will gladly take a risk, once you help him understand why it would be a greater risk not to.

The Strategic Pivot: Rules for Entrepreneurs and Other Innovators

Silicon Valley culture is built around great pivots — a sudden shift in strategy that turns a mediocre idea into a billion-dollar company.

Groupon began not as a local coupon business, but as a platform for collective action. Pay Pal started back in 1999 as a way to "beam" money between mobile phones, Palm Pilots, and pagers. Twitter was born from a stalled podcasting startup.

At the Stanford d.school, the ability to pivot is essential to the process we teach in our Launchpad course, an introduction to entrepreneurship in which each student launches a real company, taking it from an idea to revenue in 10 weeks. Even in that extremely short timeframe, abrupt turns are inevitable. The ground rules for fluidly shifting course — or, when needed, radically altering direction — apply equally well to start-ups outside the classroom, as well as to innovative ventures within established companies.

Here are our five rules for executing a successful pivot:

1. Have an idea compost pile.

To get to a great product or service, you need to work from great insights about your customers. If your current start-up is going down the tubes because your idea isn't resonating with customers, you don't have to throw everything away. Keep the insights about your customers that you gained along the way, angel investor Michael Dearing — who co-teaches Launchpad — tells students. Some of the best insights may come from understanding why your current idea isn't delighting them. Accepting the metaphor of composting ideas makes it easier to accept the perceived cost of failure, Dearing says.

2. Know your customers, not just their statistics.

The user-centered design process we teach at the d.school focuses on developing empathy for your customers. This is much more than just understanding statistics, data, and click-through rates. You need to know them well enough to understand what's important to them, what they care about, and how your product fits into their world. One of the teams in our class developed a product for police that makes duty gear more comfortable. Through their social networks, they found a few officers they could spend time with, getting a better understanding of their lives and jobs that went far beyond technical or ergonomic specs for a product. When you know your customers so well you can see your product through their eyes, you'll have an intuitive sense for when it's time to pivot.

3. Fail earlier, more cheaply, and more often.

Failing early and often is a Silicon Valley cliché. But the key is to fail as cheaply as possible. Perry's first company, Atlas Snowshoes, failed every weekend. He'd build prototypes for new designs out of the materials he had on hand, and then try them out on weekend adventures with friends. Broken straps and cracked frames would leave him hiking out of the woods with unhappy companions in knee-deep snow. But those early, cheap failures meant that by the time he went to manufacture his product, he knew how to keep the same thing from happening to customers.

Getting time with your customers before you go to market is cheap. Show them a prototype and find out if they'll use it. Test your product or service by making it quickly with post-its, paper or a quick technology hack before you ever write a line of code. PowerPoint can substitute for an interface; a $20 Google Adwords buy will tell you a lot about driving traffic. An early pivot is exponentially cheaper than a late one.

4. Build a customer-focused culture, not a product-focused one.
A pivot can seem obvious from the top, but to those who've been executing a product that's changing direction it can be frustrating. To execute a successful shift, you need your team on board. One way to do that is to build a culture focused on making customers happy. If your team believes that pleasing your customers — by any means and over the long term — is more important than executing your current idea, it will be easier for them to accept change.

5. Don't survive mediocrity.

WorkerExpress started out as a text message-based way for homeowners to schedule hourly construction workers. But the market founders Joe Mellin and Pablo Fuentes had hoped for just wasn't there. The company wasn't in imminent danger of failing and could have limped along, but Mellin and Fuentes made the decision to pivot. In the research they'd done for their original idea they found a new direction: they realized that large contractors who need temporary help on job sites don't have any great options. In the midst of one of the largest construction droughts in American history, they managed to build a booming web-based platform.

Lots of companies find themselves in a similar spot. The key is confronting the fact that it's time to re-evaluate. If you don't have a single die-hard fan of your product — let alone the thousands you'd need to take off — it's time to pivot into something your customers are passionate about.

Nine Things Successful People Do Differently

Nine Things Successful People Do Differently

Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.

1. Get specific. When you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague — be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.

2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.

To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.

3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.

5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.

Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.

The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking .... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.

7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body — when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.

To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.

8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken.
If you want change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.

It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.

Capability Maturity Model® for Business Development (BD-CMM)

Capability Maturity Model® for Business Development (BD-CMM)

The BD-CMM is designed to guide Business Development (BD) organisations in selecting high-priority improvement actions based on the maturity of their current practices.  Its benefit is in narrowing the scope of improvement activities to those key practices that provide the most effective way to improve the organisation’s current BD performance. BD-CMM creates a vision of excellence capable of guiding major process improvement in BD. It provides its users with a framework, path, and guide for achieving dramatic process improvements in their organisations.                                                                                 Capability Maturity Model® for Business Development (BD-CMM) Image content based on the public copy of the Capability Maturity Model® for Business Development  which can be found at the following address http://www.bd-institute.org/publications.html. Users report: • Enhanced effectiveness and efficiency. • Improved predictability. • More accurate projections of revenue. • Increased control. • More precise understanding of business development costs. • Improved management visibility into business development. The model’s scope encompasses the full BD life cycle and organizational components, including marketing, sales, sales account management, proposal development, and others engaged in the BD enterprise. The model acknowledges the interdependence of all the different components and that success is dependent on teamwork. Using the BD-CMM allows organisations to work towards developing increasing maturity levels in a step-by-step manner, as indicated in this table. The attainment of higher levels of maturity leads to excellence and sustained competitive advantage. By concentrating on a focused set of practices and working aggressively to implement them, organisations can make lasting gains in their performance and competitiveness. Footnote: Levels 1 and 2 represent immature capability. Level 3 represents mature capability. Levels 4 and 5 represent advanced capability. Most companies are found to be at level 1 or 2 when subjected to a BD-CMM appraisal, which often comes as both a surprise and an incentive to introduce structured improvements to improve their maturity level.

Seven Personality Traits of Top Salespeople

Seven Personality Traits of Top Salespeople

If you ask an extremely successful salesperson, "What makes you different from the average sales rep?" you will most likely get a less-than-accurate answer, if any answer at all. Frankly, the person may not even know the real answer because most successful salespeople are simply doing what comes naturally.

Over the past decade, I have had the privilege of interviewing thousands of top business-to-business salespeople who sell for some of the world's leading companies. I've also administered personality tests to 1,000 of them. My goal was to measure their five main personality traits (openness, conscientiousness, extraversion, agreeableness, and negative emotionality) to better understand the characteristics that separate them their peers.

The personality tests were given to high technology and business services salespeople as part of sales strategy workshops I was conducting. In addition, tests were administered at Presidents Club meetings (the incentive trip that top salespeople are awarded by their company for their outstanding performance). The responses were then categorized by percentage of annual quota attainment and classified into top performers, average performers, and below average performers categories.

The test results from top performers were then compared against average and below average performers. The findings indicate that key personality traits directly influence top performers' selling style and ultimately their success. Below, you will find the main key personality attributes of top salespeople and the impact of the trait on their selling style.

1. Modesty. Contrary to conventional stereotypes that successful salespeople are pushy and egotistical, 91 percent of top salespeople had medium to high scores of modesty and humility. Furthermore, the results suggest that ostentatious salespeople who are full of bravado alienate far more customers than they win over.

Selling Style Impact: Team Orientation. As opposed to establishing themselves as the focal point of the purchase decision, top salespeople position the team (presales technical engineers, consulting, and management) that will help them win the account as the centerpiece.

2. Conscientiousness. Eighty-five percent of top salespeople had high levels of conscientiousness, whereby they could be described as having a strong sense of duty and being responsible and reliable. These salespeople take their jobs very seriously and feel deeply responsible for the results.

Selling Style Impact: Account Control. The worst position for salespeople to be in is to have relinquished account control and to be operating at the direction of the customer, or worse yet, a competitor. Conversely, top salespeople take command of the sales cycle process in order to control their own destiny.

3. Achievement Orientation. Eighty-four percent of the top performers tested scored very high in achievement orientation. They are fixated on achieving goals and continuously measure their performance in comparison to their goals. 

Selling Style Impact: Political Orientation. During sales cycles, top sales, performers seek to understand the politics of customer decision-making. Their goal orientation instinctively drives them to meet with key decision-makers. Therefore, they strategize about the people they are selling to and how the products they're selling fit into the organization instead of focusing on the functionality of the products themselves.

4. Curiosity. Curiosity can be described as a person's hunger for knowledge and information. Eighty-two percent of top salespeople scored extremely high curiosity levels. Top salespeople are naturally more curious than their lesser performing counterparts.

Selling Style Impact: Inquisitiveness. A high level of inquisitiveness correlates to an active presence during sales calls. An active presence drives the salesperson to ask customers difficult and uncomfortable questions in order to close gaps in information. Top salespeople want to know if they can win the business, and they want to know the truth as soon as possible.

5. Lack of Gregariousness. One of the most surprising differences between top salespeople and those ranking in the bottom one-third of performance is their level of gregariousness (preference for being with people and friendliness). Overall, top performers averaged 30 percent lower gregariousness than below average performers.

Selling Style Impact: Dominance. Dominance is the ability to gain the willing obedience of customers such that the salesperson's recommendations and advice are followed. The results indicate that overly friendly salespeople are too close to their customers and have difficulty establishing dominance.

6. Lack of Discouragement. Less than 10 percent of top salespeople were classified as having high levels of discouragement and being frequently overwhelmed with sadness. Conversely, 90 percent were categorized as experiencing infrequent or only occasional sadness.

Selling Style Impact: Competitiveness. In casual surveys I have conducted throughout the years, I have found that a very high percentage of top performers played organized sports in high school. There seems to be a correlation between sports and sales success as top performers are able to handle emotional disappointments, bounce back from losses, and mentally prepare themselves for the next opportunity to compete.

7. Lack of Self-Consciousness. Self-consciousness is the measurement of how easily someone is embarrassed. The byproduct of a high level of self-consciousness is bashfulness and inhibition. Less than five percent of top performers had high levels of self-consciousness.

Selling Style Impact: Aggressiveness. Top salespeople are comfortable fighting for their cause and are not afraid of rankling customers in the process. They are action-oriented and unafraid to call high in their accounts or courageously cold call new prospects.

Not all salespeople are successful. Given the same sales tools, level of education, and propensity to work, why do some salespeople succeed where others fail? Is one better suited to sell the product because of his or her background? Is one more charming or just luckier? The evidence suggests that the personalities of these truly great salespeople play a critical role in determining their success.